Financial Crisis: Greece By: Hong Lai Sylvia Zheng

Discussion Topics  Background Information  Greece’s Imports and Exports  Causes of Financial Crisis  Financial Crisis in Greece  How Greece Financial Crisis Affect Other Countries  Solutions

Background Information  Greece, a Parliamentary Republic  Prime Minister, George Papandreou  Capitalist economy with the public sector accounting for about 40% of GDP  Member of EU Greece joined in 1981 In 2001, 12 th member of the European Economic and Monetary Union

Greece’s Imports and Exports  Greece imports twice as much as they export

Greece’s Imports and Exports  Exports (2009 estimated)-$21.37 billion Manufactured goods, food and beverages, petroleum products, cement, chemicals Major markets: Germany, Italy, Bulgaria, U.S., U.K., Romania  Imports (2009 estimated)-$64.27 billion Food and animals, crude oil, chemicals, machinery, transport equipments Major suppliers: Germany, Italy, France, Netherlands, Russia  Tourism is the main income for Greece Provided 15% of GDP

Causes of Financial Crisis

 Public debt: 126.8% of GDP (2009) increased to 144% of GDP (2010)  Inflation: 1.2% (2009) increased to 4.5% (2010)  Unemployment rate: 9.4% (2009) increased to 12% (2010)  Current Account Balance: -$34.43 billion (2009) to -$17.1 billion (2010)

Financial Crisis in Greece  Government overspending with its national debt is $413.6 billion Paying out salaries on the government dime, with huge holiday bonuses Employees were paid a 14-month year instead of 12 months Also, the extra money gave many Greeks in their early retirement  One of the worst countries with debt in Europe National debt, at €300 billion (aka $413.6 billion), is larger than the country's economy Prediction estimated that the national debt will reach 120% of GDP in 2010 The country's deficit is 12.7% of its national economy

Probability of Countries Being Unable to Pay Back Debt

How Greece Financial Crisis Affect Other Countries  Contagion If Greece is not helped, it could drag down the entire European Union Threatening economies: Portugal, Spain and Italy  The impact on the common European currency 15 other euro zone economies who have agreed to help out Greece IMF announced a bail-out package €95 billion ( $146.2 billion)

An Explanation of Greece’s Financial Crisis Video

Solutions  What Greece implemented Raise taxes on fuel, tobacco, and alcohol Raise the retirement age by 2 years Decrease government spending  Recommendation Sterilization 1.Decrease Unemployment 2.Fix Inflation Rates ?

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"Commission Recommendations for Greece." European Commission Economic and Financial Affairs. EUROPA, 2 Mar Web. 27 Feb Castle, Stephen. "Pressure Rises on Greece to Explain and Fix Crisis." Global Business. The New York Times, 16 Feb Web. 26 Feb Wearden, Graeme. "Europe's Financial Crisis: As It Happened." Guardian | Guardian.co.uk. Business Blog, 28 Apr Web. 27 Feb Pearlstein, Steven. "Greece and the Myth of the Easy Economic Fix." Politics, National, World & D.C. Area News and Headlines - Washingtonpost.com. The Washington Post, 05 May Web. 26 Feb "An Explanation of Greece's Financial Crisis." YouTube- Broadcast Yourself. YouTube, 09 Apr Web. 27 Feb